2024 Guide to Debt Consolidation and Relief in Arizona

The average per-capita debt balance in Arizona is $53,060, while the average income in the state is just $43,650. That means that on average, each resident of owes an average of $9,410 more than they earn in a year.

In addition, the state has an older population. More than a million of the state’s 7.2 million residents are age 65 or older. That’s 17.6% of the state’s residents.

Due to these factors, many Arizona residents are struggling to repay their debts. If you’re one of them, here’s everything you need to know to become debt-free.

How to Become Debt-Free in Arizona

Here is a look at each program to help you determine what works best if you seek Alaska debt relief:

1. Debt Consolidation Loan

Works best for: People with 670+ credit scores

Debt consolidation loans involve using a new, larger loan to pay off your other unsecured debts, including credit cards. A debt consolidation loan should typically have a lower interest rate than your current debts to be effective.

This leaves you with one monthly payment and one creditor, saving money and simplifying your payments.

2. Debt Consolidation Company / Debt Consolidation Program

Works best for: Anyone with more than $10,000 in unsecured debt who is struggling to make their payments and wants to avoid bankruptcy.

Debt settlement involves negotiating with creditors to repay less than the total amount they owe, sometimes as a lump sum and sometimes as a longer-term payment plan.

In Arizona, debt settlement can help you pay off different forms of consumer debts, including:

Credit cards/lines of credit
Personal loans
Department store cards
Old judgments
Student loans in default
Other unsecured loans or debts

To make debt settlement work, you must stop paying your debts for three to six months until your creditor charges off the debt. This will damage your credit score but will incentivize the creditors to negotiate. Once settlements are reached, and payments are made, your credit score will rebound.

Pro tip: The average debt settlement customer ends up debt-free while paying about 75% to 80% of the total enrolled in the program after all fees are paid.

Debt Settlement Risks

Your creditors aren’t obligated to settle
If a creditor refuses to settle, you could end up having to pay accrued interest and late fees
Missed payments will show up on your credit report
You may have to report the forgiven amount as income tax to the IRS
Alabama debt consolidation companies
Looking for a debt consolidation agency in Alabama to help you get a handle on debts? Here are a few firms that could help:

Best Overall: DebtHammer

DebtHammer helps borrowers overwhelmed by unsecured debts ranging from payday loans and tribal loans to credit cards and medical bills.

After a free consultation to review your situation, the DebtHammer representative will offer you a menu of options. You will decide on the course of action you prefer. These options may include debt settlement, debt consolidation, bankruptcy or others. DebtHammer requires a minimum debt of $7,500 for program enrollment or $1,000 in payday loans. The company charges 25% of the total enrolled debt.

READ MORE: DebtHammer review

Though based in Texas, DebtHammer currently provides solutions to residents of Arizona, Alaska, Alabama, Arkansas, California, Delaware, Florida, Georgia, Illinois, Kansas, Louisiana, Maine, Massachusetts, Michigan, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming. Some service options may not be available in all states.

Click here to schedule a free consultation.

More Debt Relief Companies

Arizona Debt Relief: 320 E Virginia Ave, Phoenix, AZ; (602) 714-8963; arizonadebtreliefhelp.com
Optimal Debt Relief: 14500 N Northsight Blvd, Scottsdale, AZ; (480) 680-8067; Optimaldebtrelief.com
Phoenix Debt Relief Help Center: 2942 N 24th St Unit 114, Phoenix, AZ; (602) 223-1700; debtend.org
Freedom Debt Relief: 2116 S Freedom Way, Tempe; (800) 910-0065; freedomdebtrelief.com
Debt Negotiation Services Debt Settlement Company: Boynton Beach, CA (561) 964-6404 thednsway.com
Alleviate Financial Solutions 4 Park Plaza Suite 1500, Irvine, CA; (800) 308-2935 alleviatefinancial.com
Guardian Litigation Group: 17922 Fitch Suite 150, Irvine, CA; (949) 312-4226 guardianlit.com
New Era Debt Solutions: 330 Wood Rd., Suite B Camarillo, CA; (805) 303-8773 neweradebtsolutions.com
Global DS 675 W Indiantown Rd. Jupiter, FL; (866) 677-5044 globaldsgroup.com
InCharge Debt Solutions: Orlando, FL; (800) 565-8953 incharge.org
Golden Financial Services Debt Settlement Corporation: Lake Worth, FL, (619) 600-5189 goldenfs.org
National Debt Relief 180 Maiden Ln 30th floor, New York, NY; (800) 300-9550 nationaldebtrelief.com
DebtBlue: 1125 E Campbell Rd Suite 200, Richardson, TX; (855) 269-9462 try.debtblue.com

Arizona Debt Settlement Attorneys

Lawyers Title of Arizona (formerly LandAmerica Transnation): 2580 Highway 95 Ste 121 Bullhead City, AZ; (928) 763-3211
Global Finance: 6501 E Greenway Pkwy Ste 103-549 Scottsdale, AZ; (800) 520-9942
Consumer Protection Legal Center; 40 N Central Ave #1400 Phoenix, AZ; (480) 696-5811
Ark Financial Services, LLC: Phoenix, AZ; (602) 344-9102

Eligible Debts

When seeking debt relief in Arizona, it’s important to note that not all types of debt are eligible. Debts that can be included in the state’s debt settlement programs include:

Credit cards
Department store cards
Signature loans
Personal lines of credit
Old repossessions
Other unsecured debts
Old judgments
Private student loans in default

Ineligible Debts

Debts that don’t typically qualify for debt settlement in Florida include:

Home mortgages
Federal student loans
Car loans
Other secured debts
Credit Union debts
Medical bills

3. Debt Management

Works best for: People with primarily credit card debt. Many credit counseling agencies work exclusively with credit card debt (and thus won’t be a help if you need to consolidate medical bills or student loans.)

A debt management program will usually reduce the interest rates on your credit cards from the current average of about 20% to somewhere around 9%. This will lower your monthly payment. However, unlike debt settlement, you will repay the full amount you owe, plus a lower amount of interest. The program usually takes 3-5 years to complete.

Pro tip: It’s important to note that only 55% to 70% of customers who enroll in DMPs successfully complete the program. If you enroll in a Debt Management Plan but don’t complete it, your financial situation could worsen.

So, for example, if you had $5,000 in credit card debt and were paying 25% interest, your monthly interest rate would be $105. If you reduce the interest to 8%, you’ll pay $33 a month in interest. That’s a $72 savings that you could apply to reducing your debt and paying it off faster.

These programs are usually set up and administered by nonprofit credit counseling agencies.

Like with debt settlement, debt management does not involve a loan. Credit scores won’t matter. But if you default on payments, your creditor could raise the interest rate back to its original amount.

Credit Counseling Agencies in Arizona

American Consumer Credit Counseling, Inc: 20 E Thomas Rd, Phoenix, AZ 85012; (800) 769-3571; www.consumercredit.com
Credit Absolute: 7702 E Doubletree Ranch Rd #300, Scottsdale, AZ; (480) 478-4304; www.creditabsolute.com
AZ Credit Medix, LLC: 4500 S Lakeshore Dr #343, Tempe, AZ; (888) 959-8893; www.azcreditmedix.com
Imperial Ethics Credit Repair: 6751 N Sunset Blvd Suite 320, Glendale, AZ; (480) 754-9066; www.imperialethics.com
The Credit Clinic: 4500 S Lakeshore Dr # 415, Tempe, AZ; (480) 557-7400; www.acreditclinic.com
Take Charge America: 20430 N 19th Ave Suite B155, Phoenix, AZ; (623) 266-6100; takechargeamerica.org
Andorra Credit Repair, Corp.: 17470 N Pacesetter Way, Scottsdale, AZ; (480) 305-2003; www.andorracreditrepair.com
Money Management International: 2401 W Peoria Ave Ste. 350, Phoenix, AZ; (602) 246-4520; www.moneymanagement.org
Vanderford Center Inc. – Phoenix: 1725 S. Berry Knoll Blvd. Centennial Park, AZ; (928) 875-8000
Pro Card Services Inc.: 806 N. 24th Street #2 Phoenix, AZ; (877) 645-0138
National Credit Rescue; 5026 E Michelle Dr. Scottsdale, AZ; (602) 930-3887

4. Bankruptcy

Works best for: People who can see no other way to get out of debt within the next five years, who’ve already suffered significant credit score damage or who’ve tried one or more of the other options and failed.

For some Arizonans seeking debt relief, bankruptcy could offer a fresh start. The two main types of personal bankruptcy are:

Chapter 7: Usually the most common option for individuals, Chapter 7 involves selling off (liquidating) the debtor’s assets to repay their creditors. Afterward, any remaining eligible debts are erased. Chapter 7 cases usually last 4 to 6 months.
Chapter 13: With Chapter 13, the debtor gets to keep most or all of their property and assets. Instead, they must set up a 3 or 5-year payment plan with their creditors to pay as much of their debts as possible. These cases are usually much more complicated and often require a bankruptcy attorney.

Most people don’t get to choose which type of bankruptcy they file. For instance, to qualify for Chapter 7, you must first pass a means test.

This test considers the individual’s income, expenses, and household size when determining if they have enough disposable income to repay their debts. Here are the current limitations for the means test, based on income and household size:

1-Member Household – $41,993.00
2-Member Household – $55,022.00
3-Member Household – $56,503.00
4-Member Household – $64,604.00
5-Member Household – $72,704.00
6-Member Household – $80,804.00
7-Member Household – $88,904.00
8-Member Household – $97,004.00
9-Member Household – $105,104.00
10-Member Household – $113,204.00

If your current monthly household income is below Arizona’s median income for a comparably-sized household, you’ll probably be able to file Chapter 7. Before filing, contact an experienced bankruptcy attorney to make sure.

READ MORE: Types of bankruptcy explained

Arizona Bankruptcy Exemptions

Some states have bankruptcy exemptions, which can protect certain assets. In Arizona, these exemptions include:

Homestead exemption: Up to $150,000
Personal property: $6,000 in household furnishings (single filer) or $12,000 (married filer)
Vehicle: Up to $6,000 (or up to $12,000 if the debtor has a qualifying disability)
Wages: Up to 75% of disposable income
Pension/retirement: Generally exempt, but with some limitations

What is the Statute of Limitations on Debt in Arizona?

The statute of limitations determines whether a creditor can legally sue a debtor (borrower) over an unpaid debt. After the statute of limitations ends, the creditor can no longer initiate a lawsuit on the outstanding debt. However, they can still try to collect the debt.

In Arizona, the statute of limitations depends on the type of debt:

Credit card debt: 3 years
Auto loan debt: 4 years
Mortgage debt: 6 years
Medical debt: 6 years
State tax debt: 10 years

Debt Collection Laws in Arizona

Arizona is protected by the federal Fair Debt Collection Practices Act (FDCPA). However, it also offers certain state protections to residents.

State Protections

In Arizona, all debt collectors are regulated by state law. The law prohibits these entities from engaging in deceptive, manipulative, or fraudulent debt collection practices. It also requires debt collection agencies to be licensed. If you are dealing with an unlicensed agency, it may be a scam.

For the most part, Arizona law is similar to the FDCPA. The key difference is that Arizona law is a criminal statute, meaning individuals cannot sue collection agencies for violating it.

Under Arizona law, the following debt collection practices are prohibited:

Sending written communications imitating any form of legal process
Claiming the debt collector practices law unless they are a lawyer
Attempting to collect any additional fees or expenses the debtor isn’t legally obligated to pay
Threatening to sell the debtor’s obligation (account) to a third-party agency
Claiming the debtor owes more than they do on an account
Stating or implying that the debt collector is working on behalf of the State of Arizona or any state agency

READ MORE: How to deal with debt collectors

Where to Make a Complaint in Arizona

The Arizona Attorney General investigates and prosecute violations of the Consumer Fraud Act and other state and federal consumer protection laws. A private citizen can also bring an action for a violation of the Consumer Fraud Act within a year of the date of the alleged violation.

If debt collectors are harassing you, file a complaint with each of the following entities:

Arizona’s Attorney General’s office
Federal Trade Commission (FTC)
Consumer Financial Protection Bureau (CFPB)

More Debt Statistics in Arizona

Many residents struggle with consumer debts, including high-interest credit cards, student loans, and auto loans. Fortunately, there are many solutions for those seeking debt relief in Arizona.

	Arizona average	National average
Average salary	$58,620	$59,428
Median household income	$65,913	$70,784
Per capita household income	$34,644	$36,430
Unemployment	3.8%	3.5%
Household debt	$36,380	$59,580
Auto loan debt	$24,946	$22,612
Credit card debt	$6,053	$6,194
Mortgage debt	$249,753	$236,443
Median mortgage payment (30-year fixed)	$1,544	$2,823
Average student loan debt	$4,920	$37,338
FICO credit score	712	714
Average VantageScore	684	701
Retirement savings	$427,418	$255,000
Child poverty	16.9%	5.2%
Overall poverty	13.5%	11.6%
2022 consumer bankruptcy filings	8,855	387,721
2022 foreclosures	3,207 (first half of 2022)	248,170
Identity thefts reported	19,018	1,108,609
Percentage of unbanked residents	3.6%	4.5%
Average credit utilization ratio	26%	31%

Payday Lending Laws in Arizona: Prohibited

Payday lending is illegal in the state of Arizona. The maximum interest rate (APR) on a short-term loan is 36%.

The maximum loan term varies by the principal (size of the loan). Here are the maximum terms based on the principal balance:

$0 to $1,000: 25 months and 15 days
$1,000 to $2,500: 36 months and 15 days
$2,500 to $4,000: 48 months and 15 days
$4,000 to $6,000: 60 months and 15 days
$6,000+: No legal payment term requirements

You cannot face criminal charges for being unable to repay your payday loan in Arizona. However, if a lender sues you or you receive a court order and you ignore it, a warrant may be issued for your arrest, so be sure to appear in court as scheduled.

The lender may try many different ways to contact you, including phone calls, texts and letters from lawyers.

More Resources for Arizona Residents Facing Hardship

Arizona offers a variety of local and state programs for residents looking for help with debt or finances. Among other things, these resources can provide low-cost or free childcare, job-related education and training, healthcare, and legal aid. Some programs can also help with the cost of rent or utilities.

Some of the main food banks in the state include:

Desert Mission Food Bank: 9229 N 4th St, Phoenix, AZ; (602) 870-6062
St. Mary’s Food Bank: 2831 N 31st Ave, Phoenix, AZ; (602) 242-3663
Community Food Bank: 3003 S Country Club Rd, Tucson, AZ; (520) 622-0525; communityfoodbank.org
United Food Bank: 245 S Nina Dr, Mesa, AZ 85210; (480) 926-4897
Superstition Community Food Bank: 575 N Idaho Rd #701, Apache Junction, AZ ; (480) 983-2995
PV Community Food Bank; 10862 N 32nd St, Phoenix, AZ; (602) 867-9228
Midwest Food Bank: 725 E Baseline Rd, Gilbert, AZ; (480) 892-0134
Northern Arizona Food Bank: 3805 E Huntington Dr, Flagstaff, AZ; (928) 526-2211
West Valley Community Food Pantry: 7205 N 51st Ave, Glendale, AZ; (623) 848-8278

How to File for Unemployment in Arizona

To apply for unemployment benefits in Arizona, you’ll need to provide the following:

Full legal name
Social Security Number
Mailing address and county of residence
Government ID (ex. driver’s license)
Employment history for the past 18 months
Most recent date of work

You can apply online. For details, go to the Arizona Department of Economic Security. Or use this step-by-step guide for how to apply.

State Hardship Programs

Arizona offers many grants, local, and government-run programs to those who need help with a financial crisis. These programs are designed to help eligible individuals, families, and children with things like:

Medical expenses
Legal assistance
Dealing with debt collectors
Rent and mortgage payments
Utility bills

If you’re seeking debt relief or bill payment assistance in Arizona, here are some of the best options.

Community Action Programs (CAPs): The Community Services Division partners with community partners and local governing bodies to provide help with utility bills and rental payments. It also contracts with local CAPs for the Low-Income Home Energy Assistance Program (LIHEAP), a federally-funded program. LIHEAP helps low-income households pay their heating and cooling bills by maximizing energy efficiency, minimizing energy crises, and making energy costs more affordable.
Comprehensive Energy Assistance Program (CEAP): This utility assistance program is designed to help low-income households meet their immediate energy needs by improving efficiency and lowering energy bills. It also serves as a long-term advocate in assisting Arizonans to control their energy costs for years to come through energy education.
Arizona Health Care Cost Containment System (AHCCCS): The AHCCCS is the state’s Medicaid agency. It provides several healthcare programs to uninsured or underinsured residents. Its goal is to ensure families and individuals have access to vital healthcare services, including preventative care (ex. physicals, vaccinations), prenatal care, prescriptions, and hospital/office visits. Phone: (800) 654-8713
KidsCare: KidsCare is a low-cost health insurance plan for children under the age of 19. Services include hospital care, doctor’s visits, prescription medication, lab work, preventative and emergency care, physicals, and immunizations. Some individuals may also receive vision or dental screening and exams. Those who are eligible may also receive affordable monthly premiums. Phone: (877) 764-5437
SOBRA: This program falls under the AHCCCS. It includes health coverage for minors and low-income pregnant women. Services include lab work, x-rays, doctor’s visits, prescriptions, hospital stays, and behavioral health services. In most cases, there is no monthly premium.
Family Independence Program: This limited program works with low-income families who can’t fully support dependent children by helping them with their basic needs. It can also provide job training, debt education, and temporary cash grants.
Government Cash Assistance program: Available to those under the age of 19, this program provides short-term cash grants, benefits, and other supportive services. As a temporary program, its primary goal is to help those in need get back on their feet. Phone: (800) 352-8401
Legal representation: There are various pro bono (free) and low-cost legal services available to Arizona families.
Rehousing and Homeless Prevention: The Coalition to End Homelessness in Arizona serves as an advocate to end homelessness and provide safe, affordable housing for Arizona residents. It can help by providing short-term rent assistance, temporary shelter, or even halting eviction proceedings. Phone: (602) 340-9393
Job training: One Stop Centers in Arizona can help residents find employment, whether they’re new job seekers or returning to the workforce. It also offers resources for those seeking unemployment benefits or job-related training.
Free Child Care Assistance: Through the Arizona Department of Economic Security, it’s possible to get free or low-cost childcare assistance. The average monthly subsidy is around $350.

Cost of Living in Arizona

Annual Mean Wage (All Occupations)	$52,906
Median Monthly Rent	$2,000
Value of a Dollar	$1.17
Cost of Living	107.2
Cost of Living Rank	15
Grocery Cost Index	101.8
Housing Cost Index	125.3
Utilities Cost Index	94.3
Transportation Cost Index	99.2
Miscellaneous Cost Index	102.10

Source: World Population Review (updated September 2023)

The Bottom Line

Arizona debt relief is available to people struggling financially, and especially to those who seek immediate or short-term aid. The state has several licensed debt consolidation companies that can help. But it also offers a myriad of state, government, and community programs for those in need of economic assistance.

2023 Guide to Debt Consolidation and Relief in Arizona